Bitcoin Barbell

Don’t midcurve it. #Bitcoin

What does it all mean?  Why are yields and Bitcoin higher while risk assets are down and the dollar is bid?  I take you back to the correlation matrix (below).  Is it all just technical or is there a larger narrative, relating to more fiscal dominance or the mid-terms?  Or is the market already sniffing out a new era in which AI eats labor and we get to an MMT/UBI regime that creates even more fiscal dominance?  So many questions.

Liberation Day was an unforced error. There was no reason to do it. And then the Supreme Court ruled it was illegal. He did it anyway. We are now collecting tariff revenues that a court said cannot be collected. That is an illegal tax on the American people. And I need everyone to understand something the president keeps getting wrong deliberately: The foreign country does not pay the tariff. You pay the tariff. The American consumer pays the tariff. Every single time. This is poor management. Plain and simple. When you have genuinely good executive leadership — clear policy, defined objectives, competent execution — you get peace and prosperity. When you have policy where nobody can tell you what the end game is — where nobody in the room can draw you a straight line from here to there — you get chaos.

REPUBLICANS: *Control the House, Senate and the White House* DEMOCRATS: *Introduced 7 pieces of legislation to pay TSA workers* REPUBLICANS: *Block all 7 bills to pay TSA workers* Also REPUBLICANS: 'Democrats don't want to pay TSA workers'

The passing of Chuck Norris is sad, but at least everyone can now rest assured that SHA-256 won't be cracked.

Obama walked into a full-blown economic disaster and didn’t spend every day crying about the last guy…he got to work and cleaned it up. MAGAs can’t go five minutes without blaming everyone else for everything. That’s the difference: leadership vs. nonstop whining.

🚨 #BREAKINGNEWS Its appears Speaker Mike Johnson caught on hot mic that The Save Act would result in 12% to 18% voter turnout. Saying that would be huge for the Republican Party. The Save Act is a voter suppression bill. Not elections security.🚨

You can still be a Republican and disagree with terrible decisions

Ukrainians who went to the Middle East to teach how to shoot down "shaheds", were horrified by the way the US military does it - The Times - They launch up to 8 Patriot missiles at a single target - Sometimes they even use an SM-6 missile ($6 M) to shoot down 1 drone - Radars often operate without proper camouflage, essentially "shining" like beacons. In Ukraine, however, radars are constantly moved and hidden. As an example, they cite a case where just three cheap drones destroyed an early detection radar AN/FPS-132 worth about $1 billion and another air defense radar (~$300 million), which had long been stationary and easily tracked by satellites. But it’s not all bad news for the US military. Pete Hegseth appears to be able to bench press 315 lbs.

If you work at a desk, incorporating "micro-exercise breaks" into the day can greatly improve your metabolic health. A 12-week study found that doing 3-minute exercise breaks every hour during the workday (e.g., marching in place, push-ups, squats, heel raises) improved fasting blood glucose, insulin sensitivity, and even waist circumference, blood pressure, and HDL cholesterol. These metabolic benefits happen because muscle contraction stimulates insulin-independent glucose uptake. This is especially beneficial after meals. Big upside for a low time and effort investment!

RIP Chuck Norris, who just passed at age 86, and who fought Bruce Lee in one of the BEST movie fight scenes of all time, in "Way of the Dragon."

More like, Death nervously asked Chuck Norris if he’d accompany him, and Chuck Norris was nice enough to agree. RIP

“I wish it need not have happened in my time," said Frodo. "So do I," said Gandalf, "and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.” Seems most applicable lately.

The Yuge Depression

Baseball is meant to be watched in person Football is meant to be watched on your couch College Basketball is meant to be watched during the day at your cubicle

Equity bears are at the brink of insanity given resilience in the indices, but odds of a breakdown are increasing now. Equities top slowly as passive flows and rotational dynamics can hold up indices for a long time. There are many structural forces rigged to push them higher, and thus it takes a lot to make them go down. Over the course of an equity bull market, buy-the-dip behavior continually gets reinforced, and the majority of capital will be controlled by adherents to this mantra. In theory, the longer prices remain coiled, the larger the move once they exit the range. This nuke in gold suggests there are liquidity issues brewing under the surface. It feels like a preview of what is going to happen to crowded trades. My theory is the Middle East is selling gold to shore up capital, as they have lost their revenue, and have many expenses around defence. They will also need to rebuild lost energy infra, and eventually, new pipelines to reroute around Hormuz. The buyback window is starting to close, and the sugar rush of higher-than-usual tax refunds is starting to fade. Retail has been a key marginal buyer of equities in these past weeks, and the fading of the tax refund tailwind is critical. The market is gradually coming to terms with the fact that this conflict may last for a long time. On a conventional level, the US and Israel have completely dominated Iran, but Iran has an asymmetric edge when it comes to controlling world oil prices through Hormuz. Trump can still end it, but the issue is that the US cannot simply leave, a ceasefire with Iran must be struck in order to guarantee that Hormuz is reopened. In order to strike a ceasefire, Iran wants to see a guarantee that the US and Israel won't attack them again (at a bare minimum), and it will be difficult for the US to get Israel to agree to that. Trump is used to being able to quickly maneuver according to his whims, as he did with tariffs, but the complex interlocking physical realities of war are different. Oil shocks often contribute to the end of bull markets, since they constrain consumer spending, hit manufacturing, and lower the ability of central banks to offer support. Indeed, the Fed came out slightly hawkish yesterday, and Powell also hinted that he may stay in his Governor seat post his role as Chair ending, which would constrain Trump's plans to unleash liquidity. We have a stronger dollar and long duration bond yields are going up over the world, which tightens liquidity. The Middle East is tight on money now and they were the marginal bidder in many assets. In particular, they were a key funder for AI capex through their investments in the frontier labs. They've been 40-50% of recent big rounds. Remember other deep pockets like Softbank are close to being tapped out. Any dollar that goes into these rounds will have to come out of something else, like liquid stocks (look at my pinned post for this broader thesis). And if we have any signs of risk to AI capex expectations, this will be a major shift that the market needs to contemplate. I've said this before, but puts are a difficult way to express bearish equity views because timing is so uncertain. Equities can hold on for a long time, because they are structurally rigged to go higher. Easier expressions are simply being in cash, or gradually shorting cash stocks over time, which helps avoid getting chopped. This is a very difficult market, stay safe out there.

So… they knew Joe Kent was leaking classified information, and they let him remain in his position with the highest security clearance in the country? They are going after this guy for speaking out.

One more policy recommendation from me to WH to encourage drilling is to waive the metal tariffs for the energy sector.

$200 billion would pay for free college for every American, $10 day childcare, 1000 new trade schools, the 40% federal share of special needs education and a lot more. What are we even doing here? MAGA is now Iran first?

The FBI started investigating Joe Kent before anyone on the Epstein list